loan, promising to repay the amount over a number of years. If the company does not consider the person a good credit risk (one who will be able to repay the loan), it will request that someone else sign the note to ensure that the company will be repaid. Suc h a person may be an accommodation endorser, because he or she endorses the note after it has been completed, or an accommodation maker, be- cause he or she must sign the note with the accommodation party. An accommodation party is liable to the person or business that extended credit to the accommodation party, but not to the accom- modated party. The accommodation party is liable for the amount specified on the ACCOMMODATION PAPER. If an accommodat ion party repays the debt, he or she can seek reimbursement from the accommodated party. ACCOMPANY To go along with; to go with or to attend as a companion or associate. A motor vehicle statute may require begin- ning drivers or drivers under a certain age to be accompanied by a licensed adult driver when- ever operating an automobile. To comply with such a law, the licensed adult must supervise the beginner and be seated in such a way as to be able to render advice and assistance. ACCOMPLICE One who knowingly, voluntarily, and with common intent unites with the principal offender in the commission of a crime. One who is in some way concerned or associated in commission of crime; partaker of guilt; one who aids or assists, or is an accessory. One who is guilty of complicity in crime charged, either by being present and aiding or abetting in it, or having advised and encour- aged it, though absent from place when it was committed, though mere presence, acquiescence, or silence, in the absence of a duty to act, is not enough, no matter how reprehensible it may be, to constitute one an accomplice. One is liable as an accomplice to the crime of another if he or she gave assistance or encouragement or failed to perform a legal duty to prevent it with the intent thereby to promote or facilitate commission of the crime. An ACCOMPLICE may assist or encourage the principal offender with the intent to have the crime committed, the same as the chief actor. An accomplice may or may not be present when the crime is actually committed. How- ever, without sharing the criminal intent, one who is merely present when a crime occurs and stands by silently is not an accomplice, no matter how reprehensible his or her inaction. Some crimes are so defined that certain persons cannot be charged as accomplices even when their condu ct significantly aids the chief offender. For example, a businessperson who yields to the EXTORTION demands of a racketeer or a parent who pays ransom to a kidnapper may be unwise, but neither is a principal in the commission of the crimes. Even a victim may unwittingly create a perfect opportunity for the commission of a crime but cannot be consid- ered an accomplice because he or she lacks a criminal intent. An accomplice may supply money, guns, or supplies. In one case, an accomplice provided his own blood to be poured on selective service files. The driver of the getaway car, a lookout, or a person who entices the victim or distracts possible WITNESSES is an accomplice. An accomplice can be convicted even if the person that he or she aids or encourages is not. He or she is usually subject to the same degree of punishment as the principal offender. In the 1982 decision of Enmund v. Florida, 458 U.S. 782, 102 S. Ct. 3368, 73 L. Ed. 2d 1140, the SUPREME COURT OF THE UNITED STATES ruled that the death PENALTY could not be constitutionally imposed upon an accomplice to a felony- murder, a crime leading to MURDER,ifheor she had no intention to, or did not, kill the victim. Earl Enmund drove the getaway car from a ROBBERY that resulted in the murder of its victims, an elderly married couple. Although Enmund remained in the car during the robbery and consequent killings and the trial record did not establish that he intended to facilitate or participate in a murder, the trial court sentenced him to death, along with the persons who actually killed the victims, upon his conviction for robbery in the first degree. In overturning the decision, the Supreme Court reasoned that to condemn such a DEFENDANT to death violated the Eighth and Fourteenth Amendments to the CONSTITUTION, which pro- hibited CRUEL AND UNUSUAL PUNISHMENT in state prosecutions. The death penalty was an exces- sive punishment in light of the “criminal culpability” of this accomplice. GALE ENCYCLOPEDIA OF AMERICAN LAW, 3RD E DITION 58 ACCOMPANY CROSS REFERENCES Capital Punishment; Criminal Law; Eighth Amendment; Fourteenth Amendment; Sentencing. ACCOMPLICE WITNESS A witness to a crime who, either as principal, accomplice, or accessory, was connected with the crime by unlawful act or omission on his or her part, transpiring either before, at time of, or after commission of the offense, and whether or not he or she was present and participated in the crime. Generally, there can be no conviction solely on the basis of what is said by an accomplice witness; there must be evidence from an unrelated source to corroborate the witness’s TESTIMONY. ACCORD An agreement that settles a dispute, generally requiring an obligee to accept a compromise or satisfaction from the obligor with something less than what was originally demanded. Also often used synonymously with treaty. ACCORD AND SATISFACTION A method of discharging a claim whereby the parties agree to give and accept something in settlement of the claim and perform the agree- ment, the accord being the agreement and the satisfaction its execution or performance, and it is a new contract substituted for an old contract which is thereby discharged, or for an obligation or cause of action which is settled, and must have all of the elements of a valid contract. To constitute an accord and satisfaction, there must have been a genuine dispute that is settled by a meeting of the minds with an intent to compromise. Where there is an actual controversy, an ACCORD and satisfaction may be used to settle it. The controversy may be founded on contract or tort. It can arise from a collision of motor vehicles, a failure to deliver oranges ordered and paid for, or a refusal to finish constructing an office building, etc. In former times, courts recognized an accord and satisfaction only when the amount of the controversy was not in dispute. Otherwise, the RESOLUTION had to be by COMPROMISE AND SETTLE- MENT . The technical distinction is no longer made, however, and a compromise of amount can properly be part of an accord and satisfaction. The amount, whether disputed or not, is usually monetary, as when a pedestrian claims $10,000 in DAMAGES from the driver who struck him. The amount can be a variety of other things, however, as when a homeowner claims that she ordered a swimming pool thirty-six feet long rather than thirty-five feet or when an employee insists that he is entitled to eleven rather than ten days of vacation during the rest of the calendar year. An accord and satisfaction can be made only by persons who have the legal capacity to enter into a contract. A SETTLEMENT is not binding on an insane person, for example; and an infant may have the right to disaffirm the contract. Therefore, a person, such as a guardian, acting on behalf of a person incapable of contracting for himself or herself may make an accord and satisfaction for the person committed to his or her charge, but the law may require that the guardian’s actions be supervised by a court. An executor or administrator may bind an estate; a TRUSTEE can accept an accord and satisfaction for a trust; and an officer can negotiate a settlement for a corporation. A third person may give something in satisfaction of a party’s debt. In such a case, an accord and satisfaction is effected if the creditor accepts the offer and the debtor authorizes, participates in, or later agrees to, the transaction. For example, a widower has an automobile accident but is mentally unable to cope with a lawsuit because his wife has just died. He gratefully accepts the offer of a close family friend to talk to the other driver, who has been threatening a lawsuit. The friend convinces the other driver that both drivers are at fault to some extent. The friend offers to pay the other driver $500 in damages in exchange for a written statement that she will not make any claim against the widower for damages resulting from the accident. The family friend and the other driver each sign a copy of the statement for the other, and when the payment is made, the accord and satisfaction is complete. If the other driver then sues the widower for more money on account of the accident, the widower could show that he agreed to let his friend negotiate an accord and satisfaction, and the court would deny relief. An accord and satisfaction is a contract, and all the essential elements of a contract must be present. The agreement must in- clude a definite offer of settlement and an GALE ENCYCLOPEDIA OF AMERICAN LAW, 3RD E DITION ACCORD AND SATISFACTION 59 unconditional acceptance of the offer accord- ing to its terms. It must be final and definite, closing the matter it covers and leaving nothing unsettled or open to question. The agreement may call for full payment or some compromise anditneednotbebasedonanearlier agreement of the parties. It does not necessarily have to be in writing unless it comes WITHIN TH E STATUTE of frauds. Unless there are matters intentionally left outside the accord and satisfaction, it settles the entire controversy between the parties. It extinguishes all the obligations arising out of the underlying contract or tort. Where only one of two or more parties on one side settles, this ordinarily operates to discharge all of them. The reason for this is the rule that there should be only one satisfaction for a single injury or wrong. This rule does not apply where the satisfaction is neither given nor accepted with the intention that it settle the entire matter. An accord without satisfaction generally means nothing. With a full satisfaction, the accord can be used to defeat any further claims by either party unless it was reached by FRAUD, DURESS,orMUTUAL MISTAKE. An accord and satisfaction can be distin- guished from other forms of resolving legal disputes. A payment or performance means that the original obligations were met. A release is a formal relinquishment of the right to enforce the original obligations and not necessarily a compromise, as in accord and satisfaction. An ARBITRATION is a settlement of the dispute by some outside person whose determination of an award is voluntarily accepted by the parties. A COMPOSITION WITH CREDITORS is very much like an accord but has elements not required for an accord and satisfaction. It is used only for disputes between a debtor and a certain number of his or her creditors, while an accord and satisfaction can be used to settle any kind of controversy—whether arising from contract or tort—and ordinarily involves only two parties. Although distinctions have occasionally been drawn between an accord and satisfaction and a compromise and settlement, the two terms are often used interchangeably. A NOVATION is a kind of accord in which the promise alone, rather than full performance, is satisfaction, and is accepted as a binding resolution of the dispute. FURTHER READINGS Dolson, Andrew J. 1995. “Accord and Satisfaction under Article 3A of the UCC: A Trap for the Unwary.” Virginia Bar Association Journal 21 (winter). Floyd, Michael D. 1994. “How Much Satisfaction Should You Expect from an Accord? The U.C.C. Section 3-311 Approach.” Loyola Univ. of Chicago Law Journal 26 (fall). Veltri, Stephen C., Marina I. Adams, and Paul S. Turner. 2004. “Payments.” Business Lawyer 59. ACCOUCHEMENT The act of giving birth to a child. The fact of accouchement may be proved by the direct TESTIMONY of some one who was present, such as a midwife or a physician, at the time of birth. It may be significant in proving parentage; for example, where there is some question about who is entitled to inherit property from an elderly person who died leaving only distant relatives. ACCOUNT A written list of transactions, noting money owed and money paid; a detailed statement of mutual demands arising out of a contract or a fiduciary relationship. Accouchement: U.S. Births and Birthrates SOURCE: National Center for Health Statistics, National Vital Statistics Report, vol. 57, no. 12, March 18, 2009. Births (in millions) Birthrate ( per 1,000) 0 1 2 3 4 5 0 5 10 15 20 25 30 35 2000 4.06 2007 4.30 1990 4.16 1980 3.61 Births (in millions) Birthrate (per 1,000) Year 1940 2.56 1960 4.26 3.73 1970 3.63 1950 ILLUSTRATION BY GGS CREATIVE RESOURCES. REPRODUCED BY PERMISSION OF GALE, A PART OF CENGAGE LEARNING. GALE ENCYCLOPEDIA OF AMERICAN LAW, 3 RD E DITION 60 ACCOUCHEMENT An account can simply list payments, losses, sales, debits, credits, and other monetary trans- actions, or it may go further and show a balance or the results of comparing opposite transa c- tions, like purchases and sales. Businesspersons keep accounts; attorneys may keep escrow accounts; and executors must keep accounts that record transactions in administering an estate. ACCOUNT, ACTION ON A civil lawsuit maintained under the common law to recover money owed on an account. The action on account was one of the ancient FORMS OF ACTION. Dating back to the thirteenth century, it offered a remedy for the breach of obligations owed by fiduciaries. Originally, the action al lowed lords to recover money wrong- fully withheld by the bailiffs of their manors, whom they appointed to collect fines and rents. Later, statutes extended the right so that law- suits could be brought against persons who were required to act primarily for someone else’s benefit, such as guardians and partners. Eventually, the action withered away be cause its procedure was too cumbersome, and fiduciaries came under the jurisdiction of the special court of the king, called the CHANCERY. An action on account is different from a modern-day ACCOUNTING, which is a settling of accounts or a determination of transactions affecting two parties, often when one party asks a court to order the other party to account. ACCOUNT PAYABLE A debt owed by a business that arises in the normal course of its dealings, that has not been replaced by a note from another debtor, and that is not necessarily due or past due. Bills for materials received or obligations on an OPEN ACCOUNT may be accounts payable. This kind of LIABILITY usually arises from a purchase of merchandise, materials, or supplies. ACCOUNT RECEIVABLE A debt owed by a business that arises in the normal course of dealings and is not supported by a negotiable instrument. The charge accounts of a department store are accounts receivable, but income from investments usually is not. Accounts receivable generally arise from sales or service transactions. They are not necessarily due or past due. Insurance may be purchased to protect against the risk of being unable to collect on accounts receivable if records are damaged or lost. ACCOUNT RENDERED A statement of transactions made out by a creditor and presented to the debtor. After the debtor has examined the account and accepted it, an account rendered becomes an ACCOUNT STATED. ACCOUNT STATED An amount that accurately states money due to a creditor; a debt arising out of transactions between a debtor and creditor that has been reduced to a balance due for the items of account. A creditor agrees to accept and a debtor agrees that a specific sum is a true and exact statement of the amount he or she owes. The debtor may agree in words to pay the amount, or it may be understood that the debtor has accepted the account stated by failing to object within a certain period of time. ACCOUNTANT A person who has the requisite skill and experience in establishing and maintaining accurate financial records for an individual or a business. The duties of an accountant may include designing and controlling systems of records, auditing books, and preparing financial statements. An accountant may give tax advice and prepare tax returns. A public accountant renders ACCOUNTING or auditing services for a number of employees, each of whom pays the accountant a fee for services rendered. He or she does more than just BOOKKEEPING but does not generally have all the qualifications of a certified public accountant. A certified public accountant is one who has earned a license in his or her state that attests to a high degree of skill, training, and experience. In addition to passing an accounting examina- tion, a candidate must have the proper business experience, education, and moral character in order to qualify for the license. The letters CPA are commonly used and generally recognized to be the abbreviation for the title Certified Public Accountant. The practice of accounting is a highly skilled and technical profession that affects public WELFARE. It is entirely appropriate for the state GALE ENCYCLOPEDIA OF AMERICAN LAW, 3RD E DITION ACCOUNTANT 61 to regulate the profession by means of a licensing system for accountants. Some states do not permit anyone to practice accounting except certified public accountants, but other states use the title to recognize the more distinguished skills of a CPA while permitting others to practice as public accountants. All states limit the use of the title and the initials to those who are licensed as certified public accountants. All accountants are held to high standards of skill in issuing professional opinions. They can be sued for MALPRACTICE if performance of their duties falls below standards for the profession. ACCOUNTING Accounting is a system of recording or settling accounts in financial transactions and includes methods of determining income and expenses for tax and other financial purposes. Accounting is also one of the remedies available for enforcing a right or redressing a wrong asserted in a lawsuit. Various accounting methods may be employed. The accrual method shows expenses incurred and income earned for a given period of time whether or not such expenses and income have been actually paid or received by that time. The cash method records income and expenses only when monies have actually been received or paid out. The completed contract method reports gains or losses on certain long- term contracts. GROSS INCOME and expenses are recognized under this method in the tax year in which the contract is completed. The install- ment method of accounting is a method used by regulated utilities to calculate DEPRECIATION for INCOME TAX purposes. The cost method of accounting records the value of assets at their actual cost, and the fair value method uses the present MARKET VALUE for the recorded value of assets. Price leve l account- ing is a modern method of valuing assets in a FINANCIAL STATEMENT by showing their current value in comparison to the gross national product. Where a court orders an accounting, the party against whom judgment is entered must file a complete statement with the court that accounts for his or her administration of the affairs at issue in the case. An accounting is proper for showing how an executor has managed the ESTATE of a dec eased person or for disclosing how a partner has been handling PARTNERSHIP business. An accounting was one of the ancient English remedies available in courts of equity. The regular officers of the CHANCERY, who represented the king in hearing disputes that could not be taken to courts of law, were able to serve as auditors and work through complex accounts when necessary. The chancery had the power to discover hidden assets in the hands of the DEFENDANT. Later, courts of law began to recognize and enforce regular contract claims, as actions in ASSUMPSIT, and the courts of equity were justified i n compelling an accounting only when the courts at law could not give relief. A PLAINTIFF could ask for an accounting in equity when the complexity of the accounts in the case made it too difficult for a jury to resolve or when a TRUSTEE or other FIDUCIARY was charged with violating a position of trust. In the early twenty-first century, courts in the United States generally have jurisdiction both at law and in equity. They have the power to order an accounting when necessary to determine the relative rights of the parties. An accounting may be appropriate whenever the defendant has violated an obligation to protect the plaintiff’s interests. For example, an accounting may be ordered to settle disputes when a partnership is breaking up, when an HEIR believes that the executor of an estate has sold off assets for less than their FAIR MARKET VALUE,orwhenshare- holders CLAIM that directors of a corporation have appropriated for themselves a business opportu- nity that should have profited the corporation. An accounting may also be an appropriate remedy against someone who has committed a wrong against the plaintiff and should not be allowed to profit from it. For example, a bank teller who embezzles money and makes a huge profit by investing it in mutual funds may be ordered to ac count for all the money taken and the earnings made from it. A businessperson who sells a product as that of a more popular manufacturer might have to account for the entire profit made from it. A defendant who plagiarizes another author’s book can be ordered to give an accounting and pay over all the profits to the owner of the copyrighted material. An accounting forces the wrongdoer to trace all transactions that flowed from the legal injury, because the plaintiff is in no position to identify the profits. GALE ENCYCLOPEDIA OF AMERICAN LAW, 3RD E DITION 62 ACCOUNTING Arthur Andersen and Other Accounting Failures The accounting profession, which is largely self- regulated, has suffered through a series of fiascoes since the late 1990s, resulting in a call for major changes in accounting standards. The Financial Accounting Standards Board (FASB) has served since 1973 as one of the organiza- tions responsible for establishing standards of financial accounting and reporting. Although the FASB is a private organization, its standards are recog nized as authoritative by the SECURITIES AND EXCHANGE COMMISSION (SEC) and the Ameri- can Institute of Certified Public Accountants. In the late 1990s and early 2000s, debacles involving major accounting firms required the FASB and the SEC, as well as other regulatory organizations, to consider new rules designed to improve financial reporting. Between 1996 and 2002, investors lost an estimated $200 billion in earnings restatements and stock meltdowns following failures in auditing processes. A number of high-profile auditing failures de- creased confidence in the accounting profession. Among these failures were incidents involving such companies as Bausch and Lomb, Rite Aid, Cendant, Sunbeam, Waste Management, Super- ior Bank, and Dollar General. One of the most highly publicized account- ing failures early in the new millennium involved Houston-based Enron Corporation and its ACCOUNTANT, Arthur Andersen, L.L.P. Enron suffered a collapse in the third quarter of 2001 that resulted in the largest BANKRUPTCY in U.S. history to date and numerous lawsuits alleging violations of federal securities laws. Thousands of Enron employees lost 401(k) retirement plans that held company stock. Enron reported annual revenues of about $101 billion between 1985 and 2000. On December 18, 2000, Enron’s stock sold for $84.87 per share. Stock prices fell throughout 2001, however, and on October 16, 2001, the company reported losses of $638 million in the third quarter alone. During the next six weeks, company stock continued to fall, and by December 2, 2001, Enron stock dropped to below $1 per share after the largest single day trading volume for any stock listed on either the New York Stock Exchange or the NASDAQ. Initial allegations focused on the role of Arthur Andersen. The company was one of the so-called Big Five accounting firms in the United States, and it had served as Enron’s auditor for 16 years. Arthur Andersen also served as a consul- tant to Enron, thus raising serious questions regarding conflicts of interests between the two companies. According to court documents, Enron and Arthur Andersen had improperly categorized hundreds of millions of dollars as increases in shareholder equity, thereby mis- representing the true value of the corporation. Arthur Andersen also did not follow GENERALLY ACCEPTED ACCOUNTING PRINCIPLES (GAAP) when it considered Enron’s dealings with related part- nerships. These dealings, in part, allowed Enron to conceal some of its losses. Arthur Andersen was also ACCUSED of destroying thousands of Enron documents that included not only physical documents but also computer files and e-mail files. After investiga- tion by the U.S. JUSTICE DEPARTMENT, the firm was indicted on OBSTRUCTION OF JUSTICE charges in March 2002. The government also charged the company with violating federal law, which criminalized the knowing and corrupt persua- sion of others to withhold or alter documents. After a six-week trial, Arthur Andersen was found guilty in June 2002. The company was placed on PROBATION for five years and wa s required to pay a $500,000 fine. Some analysts als o questioned whether the company could survive after this series of incidents. However, the U.S. Supreme Court, in an unanimous opinion, later reversed the criminal conviction on the ba sis of faulty and improper j ury instructions (Arthur Andersen v. United States, 544 U.S. 696 [2005]). The high court found nothing inherently corrupt about Arthur Andersen (the company) having ordered employees to destroy documents. The Court held that a conviction could be found only if prosecutors proved that company officials were aware that their conduct (in persuading the destruction of documents) was corrupt. Civil FRAUD charges (relating to accounting and auditing) were also filed in a related CLASS ACTION lawsuit by E nron stockholders (includ- ing PENSION administrators for the Unive rsity of California, the named plaintiffs) against several Wall Street investment banks, including Credit Suisse, Merrill Lynch, and JPMorgan Chase. The lawsuit charged that the banks essentially colluded with and assisted Enron officials with FRAUDULENT partnerships and transactions, ma- nipulating the true status of Enron’s financial health. This activity resulted in company officials presenting allegedly deceptive business GALE ENCYCLOPEDIA OF AMERICAN LAW, 3RD E DITION ACCOUNTING 63 reports to investors. In 2007 the Fifth Circuit Court of Appeals reversed the order ce rtifying a class action (uniting plaintiff investors), finding that the defendants were under no fiduciary or other duty to disclose the nature of Enron transactions to investors. Therefore, there could not be a class-wide presumption of reliance on defendants by investors (an essential element to prove fraud or misrepresentation) (Regents of the Univ. of Cal. v. Credit Suisse First Boston, 482 F.3d 372 [5th Cir. 2007]). In January 2008, the U.S. Supreme Court denied review of the case (No. 06-1341, 2008 WL 169504, U.S. LEXIS 1120, 76 U.S.L.W. 3392). The accounting issues in the Enron case extended beyond Enron and Arthur Andersen. In the wake of these and other major accounting/ auditing scandals, Congress passed the anti-fraud SARBANES-OXLEY ACT OF 2002, P.L. 107-204, 116 Stat. 745 (codified in various chapters and sections of the U.S. CODE). Among other things, the act created a Public Company Accounting Oversight Board (PCAOB), to be paid for by fees collected on publicly traded companies, according to their size. The Board replaced the accounting industry’s own internal regulators and had independent SUBPOENA power to facilitate its own regulation, oversight, and discipline of accoun- tants and accounting firms. The Sarbanes-Oxley Act also provided for the SEC to appoint the chairman and four directors of the PCAOB. Another important provision in the act created greater financial disclosure mandates and in- creased the criminal penalties for securities fraud. Later, the act itself came under criticism and CONSTITUTIONAL scrutiny when pro-business, anti-tax/fee plaintiffs brought suit alleging that the creation of the PCAOB violated the appoint- ments clause of the U.S. CONSTITUTION (Article II, section 2, cl. 2) as well as the constitutionally mandated SEPARATION OF POWERS. A federal district court upheld the constitutionality of the act and the PCAOB, and its decision was affirmed by the U.S. District Court of Appeals for the D.C. Circuit in 2008 (Free Enterprise Fund v. Public Company Accounting Oversight Board 537 F.3d 667 [D.C. Cir. 2008]). (In May 2009 the U.S. Supreme Court granted review of that decision for its 2009–2010 term, 77 U.S.L.W. 3431.) Despite these safeguards, one of the largest accounting and auditing frauds on record unfold- ed in 2008, when securities investment BROKER Bernard (Bernie) Madoff was formally charged in federal court in Manhattan, New York City, with SEC violations that cost investors at least $50 billion in false or nonexistent investments. In March 2009 Madoff pleaded guilty to creating false investment accounts and privately pocketing funds received from investors, periodically paying returns to some of them with money received from other prospective investors under a giant Ponzi scheme. In June 2009 he was sentenced to 150 years in prison. In connection with this case, the accounting firm of Friehling & Horowitz and partner David G. Friehling, C.P.A. were also charged with fraud and various SEC violations for falsely representing that they had conducted legitimate company audits of Madoff’s invest- ment firm over the years, when in fact they had not (Securities and Exchange Commission v. David G. Friehling, C.P.A and Friehling & Horowitz, CPAs, P.C. [S.D.N.Y. Civ. 09 CV 2467]). FURTHER READINGS Atvedlund, Erin. 2009. Too Good to Be True: The Rise and Fall of Bernie Madoff. New York: Portfolio Hardcover. Meyer, Charles H. 2002. Accounting and Finance for Lawyers in a Nutshell. 2d ed. St. Paul, Minn.: West Group. Rachlin, Robert, and Allen Sweeny. 1996. Accounting and Financial Fundamentals for Nonfinancial Executives. New York: AMACON. SEC. 2009. “SEC Charges Madoff Auditors with Fraud.” Press Release, March 18. Litigation Release No. 20959. CROSS REFERENCES Accrual Basis; Cash Basis; Income Tax. ACCREDIT To give official authorization or status. To recognize as having sufficient academic standards to qualify graduates for higher education or for professional practice. In international law: (1) To acknowledge; to receive as an envoy and give that person credit and rank accordingly. (2) To send with credentials as an envoy. This latter use is now the accepted one. ACCREDITED LAW SCHOOL A law school that has been approved by the state and the Association of American Law Schools (AALS), the American Bar Association (ABA), or both. In certain states—for example, California— it is acceptable for a law school to be accredited by the state and not by either the AALS or the ABA. In most states, however, only gra duates GALE ENCYCLOPEDIA OF AMERICAN LAW, 3RD E DITION 64 ACCREDIT of AALS or ABA accredited law schools are permitted to take the state BAR EXAMINATION . CROSS REFERENCE Legal Education. ACCRETION The growth of the value of a particu l ar item given to a person as a specific bequest under the provisions of a will between the time the will was written and the time of death of the testator— the person who wrote the will. Accretion of land is of two types: (1) by alluvion, the washing up of sand or soil so as to form firm ground; and (2) by dereliction, as when the sea shrinks below the usual watermark. The terms alluvion and accretion are often used interchangeably, but alluvion refers to the deposit itself while accretion denotes the act. Land uncovered by a gradual subsidence of water is not an accretion; it is a reliction. ACCRUAL BASIS A method of accounting that reflects expenses incurred and income earned for income tax purposes for any one year. Taxpayers who use the accrual method must include in their TAXABLE INCOME any money that they have the right to receive as payment for services, once it has been earned. Any expenses that they may take as deductions when computing taxable income must be due at the time the deduction is taken. For example, suppose a surgeon performed a tonsillectomy in October 2003, and on December 31, 2003, he received a bill for carp eting installed in the waiting room of his office. He was paid the surgical fee on January 3, 2004, the same day he paid for the carpeting. The surgical fee will be included in his taxable income for 2003, the year in which he earned it, regardless of the fact that he was not paid until the following year. His expenses for the carpeting can be deducted from his 2003 income because once he received the bill, he was bound to pay it. The fact that he did not pay fo r the carpeting until the following year does not prevent him from taking the deduction in 2003. The accrual method of ACCOUNTING differs from the CASH BASIS method, which treats income as only that which is actually received, and expense as only that which is actually paid out. If the cash method were used in the above example, the payment of the surgical fee would be included as income for the 2004 tax year, the year in which it was received by the surgeon. The surgeon could deduct the cost of the carpeting only when he actually paid for it in 2004, although it had been installed in 2003. Unearned income, such as interest or rent, is generally taxed in the year in which it is received, regardless of the accounting method that the taxpayer uses. ACCRUE To increase; to augment; to come to by way of increase; to be added as an increase, profit, or damage. Acquired; fallin g due; mad e or executed; matured; occurred; received; vested; was created; was incurred. To attach itself to, as a subordinate or accessory claim or demand arises out of, and is joined to, its principal. The term is also used of independent or original demands, meaning to arise, to happen, to come into force or existence; to vest, as in the sentence, “The right of action did not accrue within six years.” To become a present right or demand; to come to pass. Interest on money that a depositor has in a bank savings account accrues, so that after a certain time the amount will be increased by the amount of interest it has earned. A CAUSE OF ACTION, the facts that give a person a right to judicial relief, usually accrues on the date that the injury to the PLAINTIFF is sustained. When the injury is not readily discoverable, the cause of action accrues when the plaintiff in fact discovers the injury. This occurs frequently in cases of fraud or MALPRACTICE. A woman, for example, has an appendectomy. Three years after the surgery, she still experiences dull pain on her right side. She is examined by another physician who discovers a piece of surgical sponge near the area of the operation. Although the injury had occurred at the time of surgery three years earlier, in this case the cause of action for MEDICAL MALPRACTICE accrues on the date that the sponge is discovered by the second doctor. This distinction is impor- tant for purposes of the running of the STATUTE OF LIMITATIONS , the time set by law within which a lawsuit must be commenced after a cause of action accrues. In cases involving injuries that cannot be readily discovered, it would be unfair to bar a plaintiff from bringing a lawsuit because he or she does not start the suit within the required time from the date of injury. GALE ENCYCLOPEDIA OF AMERICAN LAW, 3RD E DITION ACCRUE 65 ACCUMULATED EARNINGS TAX A special tax imposed on corporations that accumulate (rather than distribute via dividends) their earnings beyond the reasonable needs of the business. The accumulated earnings tax is imposed on accumulated taxable income in addition to the corporate income tax. ACCUMULATION TRUST An arrangement whereby property is transferred by its owner—the settlor—with the intention that it be administered by someone else—a trustee— for another person’s benefit, with the direction that the trustee gath er, rather than distribute, the income of the trust and any profits made from the sale of any of the property making up the trust until the time specified in the document that created the trust. Many states have laws governing the time over which accumulations may be made. ACCUMULATIVE JUDGMENT A second or additional judgment against a person who has already been convic ted and sentenced for another crime; the execution of the seco nd judgment is postponed until the person’s first sentence has been completed. ACCUMULATIVE SENTENCE A sentence—a court’s formal pronouncement of the legal consequences of a person’s co nviction of a crime—additional to others, imposed on a defendant who has been convicted upon an indictment containing several counts, each charg- ing a distinct offense, or who is under conviction at the same time for several distinct offenses; each sentence is to run consecutively, beginning at the expiration of the previous sentence. A person must finish one sentence before being allowed to start the next one. Another name for ACCUMULATIVE SENTENCE is cumulative or consecutive sentence. The opposite of an accumulative sentence is a CONCURRENT sentence—two or more prison sentences that are to be served simultaneously, so that the prisoner is entitled to be released at the end of the longest sentence. ACCUSATION A formal criminal charge against a person alleged to have committed an offense punishable by law, which is presented before a court or a magistrate having jurisdiction to inquire into the alleged crime. The SIXTH AMENDMENT to the CONSTITUTION provides in part that a person ACCUSED of a crime has the right “to be informed of the nature and cause of the accusation.” Thus in any federal criminal prosecution, the statute setting forth the crime in the ACCUSATION must define the offense in sufficiently clear terms so that an average person will be informed of the acts that come within its scope. The charge must also inform the accused in clear and unambiguous language of the offense with which he or she is being charged under the statute. An accused has the same rights when charged with violating state CRIMINAL LAW because the Due Process Clause of the FOURTEENTH AMENDMENT applies the guarantees of the Sixth Amendment to the states. The paper in which the accusation is set forth—such as an INDICTMENT, information, or a complaint—is called an accusa- tory instrument. Most state constitutions contain language similar to that in the Sixth Amen dment. In many state rules of CRIMINAL PROCEDURE,the accusatory instrument serves to protect the state CONSTITUTIONAL rights of the accused. In Louisiana, for example, the purpose of a bill of information is to inform a DEFENDANT of the nature and cause of the accusation against him or her as required by the Louisiana State Constitution (State v. Stevenson, 2003 WL 183998 [La. App. 2003]). In order to QUASH a bill of i nformation or other accusatory instrument, the accused must present DIRECT EVIDENCE not e stablished by the record, s howing the bill w as insufficient. The accused g enerally has the BURDEN OF PROOF to demonstrate that the accusatory instrument was insufficient. The rules of evidence in a particular jurisdiction apply t o the evidentiary d etermination of the sufficiency of the accusatory instrument. CROSS REFERENCE Criminal Law. ACCUSATORY BODY Body such as a grand jury whose duty it is to hear evidence to determine whether a person should be accused of (charged with) a crime; to be distinguished from a traverse or petit jury, which is charged with the duty of determining guilt or innocence. GALE ENCYCLOPEDIA OF AMERICAN LAW, 3RD E DITION 66 ACCUMULATED EARNINGS TAX ACCUSED The generic name for the defendant in a criminal case. A person becomes accused within the meaning of a guarantee of speedy trial only at the point at which either formal indictment or information has been returned aga inst h im or her, or when he or she becomes subject to actual restraints on liberty imposed by arrest, whichever occurs first. ACKNOWLEDGMENT To acknowledge is to admit, affirm, declare, testify, avow, confess, or own as genuine. Admis- sion or affirmation of obligation or responsibility. Most states have adopted the Uniform Acknowl- edgment Act. The partial payment of a debt, for example, is consid ered an acknowledgment of it for purposes of tolling the statute of limitations— the time set by law for bringing a lawsuit— based on a person’s failure to repay a debtor. State law usually gives a creditor six years from the date a debt is due, according to the creditor’s contract with the debtor, to SUE for nonpayment. If, on the last day of the fifth year, the debtor repays any part of the loan, the STATUTE OF LIMITATIONS is tolled or suspended. The creditor then has another six years from the date of partial payment to sue the debtor for the balance of the loan. The debtor ’s partial payment indicates ACCEPTANCE of responsibility to pay the loan. If the debtor had not paid anything, he or she would have escaped LIABILITY six years after the date the loan was due. An acknowledgment of PATERNITY means recognition of parental duties—such as finan- cial support of an illegitimate child—by written agreement, verbal declaration, or conduct of the father toward the mother and child that clearly demonstrates recognition of paternity. The requirement for acknowledgmen ts on certain documents—such as deeds transferring the ownership of real property, wills giving the ownership of property to a de cedent’s heirs after death, or DOCUMENTARY EVIDENCE that is to be admitted in a legal proceeding—is established by state law. If such documents do not contain acknowledgments, they are ineffective and cannot be used in any LEGAL PROCEEDINGS. Any or all of the parties to a document may be required to acknowledge it. Only those persons specified by law, a NOTARY PUBLIC, for exa mple, may take an acknowledgment. Usually, a person making an acknowledgment does not have to explain the contents of the document to the person taking the acknowl- edgment. A person who ordinarily takes an acknowledgment might be disqualified from doing so if that person stands to gain some benefit from or has a financial interest in the outcome of the transaction. For example, state law requires a person making a will, a TESTATOR, to make an acknowledgment to a certain number of WITNESSES that the document is the genuine expression of how that person wants his or her property disposed of up on his or her death. Suppose the state requires two witnesses. If the people selected as witnesses have financial interests in the person’s will, they will be disqualified for purposes of acknowledgment. This is done to deter dishonest people from fabricating a document that is beneficial to them. Such a will is legally ineffective; once the testator dies, his or her property will be transferred according to the laws of DESCENT AND DISTRIBUTION . A certificate of acknowledgment, sometimes referred to as the acknowledgment, is evidence that the acknowledgment has been done properly. Although its contents may vary from state to state, the certificate must recite: (1) that acknowledgment before the proper officer was made by the person who completed the document; (2) the place where the acknowledg- ment took place; and (3) the name and authority of the officer. The certificate may be on the document itself or may be attached to it as a separate instrument. ACQUIESCENCE Conduct recognizing the existence of a transaction and intended to permit the transaction to be carried into effect; a tacit agreement; consent inferred from silence. For example, a new beer company is concerned that the proposed label for its beer might infringe on the trademark of its competi- tor. It submits the label to its competitor’s general counsel, who does not object to its use. The new company files an application in the PATENT AND TRADEMARK OFFICE to register the label as its trademark and starts to use the label on the market. The competitor does not file any objection in the PATENT Office. Several years later, the competitor sues the new company for infringing on its trademark and demands an GALE ENCYCLOPEDIA OF AMERICAN LAW, 3RD E DITION ACQUIESCENCE 67 . no. 12 , March 18 , 2009. Births (in millions) Birthrate ( per 1, 000) 0 1 2 3 4 5 0 5 10 15 20 25 30 35 2000 4.06 2007 4.30 19 90 4 .16 19 80 3. 61 Births (in millions) Birthrate (per 1, 000) Year 19 40 2.56 19 60 4.26 3.73 19 70 3.63 19 50 ILLUSTRATION. 1, 000) Year 19 40 2.56 19 60 4.26 3.73 19 70 3.63 19 50 ILLUSTRATION BY GGS CREATIVE RESOURCES. REPRODUCED BY PERMISSION OF GALE, A PART OF CENGAGE LEARNING. GALE ENCYCLOPEDIA OF AMERICAN LAW, 3 RD E DITION 60. punishment in light of the “criminal culpability” of this accomplice. GALE ENCYCLOPEDIA OF AMERICAN LAW, 3RD E DITION 58 ACCOMPANY CROSS REFERENCES Capital Punishment; Criminal Law; Eighth Amendment; Fourteenth